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Title:Welfare programs and labor supply in developing countries: Experimental evidence from Latin America PDF Logo
Authors:Alzúa, María Laura
Cruces, Guillermo
Ripani, Laura
Issue Date:2012
Series/Report no.:Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 6959
Abstract:This study looks at the effect of welfare programs on work incentives and the adult labor supply in developing countries. The analysis builds on the experimental evaluations of three programs implemented in rural areas: Mexico's PROGRESA, Nicaragua's RPS and Honduras' PRAF. Comparable results for the three countries indicate that the effects that the programs have had on the labor supply of participating adults have been mostly negative but are nonetheless small and not statistically significant. However, the evidence does point to the presence of other effects on labor markets. In the case of PROGRESA, there is a small positive effect on the number of hours worked by female beneficiaries and a sizeable increase in wages among male beneficiaries and a resulting increase in household labor income. Moreover, PROGRESA seems to have reduced female labor-force participation in ineligible households. These results imply that large-scale interventions may have broader equilibrium effects.
Subjects:welfare programs
income support
labor supply
work incentives
conditional cash transfers
randomized control trials
developing countries
JEL:J08
J22
I38
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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